TSX runs higher on rate cut expectations
Investing.com - Morgan Stanley downgraded Nippon Shinyaku Co Ltd (4516:JP) from Equalweight to Underweight on Wednesday, while significantly reducing its price target to JPY2,600.00 from JPY3,800.00.
The downgrade reflects concerns about the company’s growth prospects following the upcoming U.S. patent expiration of Uptravi, a pulmonary arterial hypertension (PAH) treatment, in April 2027.
Morgan Stanley highlighted that Uptravi royalties, amounting to ¥46 billion, represented 130% of operating profit in fiscal year ending March 2025, and has been the main driver of corporate growth since its 2016 launch.
The investment bank expressed skepticism about Nippon Shinyaku’s strategy to overcome the patent cliff with cell therapy CAP-1002 for Duchenne muscular dystrophy (DMD) cardiomyopathy, noting "bumpy" development progress.
Additional concerns include the potential withdrawal of Viltepso, a DMD treatment, from the U.S. market, with Morgan Stanley concluding there is "a lack of sufficient quality and quantity of new drugs to offset the patent cliff."
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.